Leisure Luxuries and the Labor Supply of Young Men

Abstract

Younger men, ages 21 to 30, exhibited a larger decline in work hours over the last fifteen years than older men or women.Since 2004, time-use data show that younger men distinctly shifted their leisure to video gaming and other recreational computer activities.We propose a framework to answer whether improved leisure technology played a role in reducing younger men's labor supply.The starting point is a leisure demand system that parallels that often estimated for consumption expenditures.We show that total leisure demand is especially sensitive to innovations in leisure luxuries, that is, activities that display a disproportionate response to changes in total leisure time.We estimate that gaming/recreational computer use is distinctly a leisure luxury for younger men.Moreover, we calculate that innovations to gaming/recreational computing since 2004 explain on the order of half the increase in leisure for younger men, and predict a decline in market hours of 1.5 to 3.0 percent, which is 38 and 79 percent of the differential decline relative to older men.

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